In October 2021, President Buhari presented to the Senate a proposed 2021 budget of N13.082 trillion. Read more on this here. However, on Monday, 21 December 2020 the Senate passed the appropriation bill of N13.588 trillion. This is N505 billion higher than the proposed N13.588 trillion.
Snapshots of Nigeria’s 2021 Approved Budget – Budget of Economic Recovery and Resilience
- Total budget size – N13.588 trillion
- Projected revenue – N7.886 trillion
- Budget deficit – N5 .196 trillion
- Statutory transfer – N496.528 billion
- Debt servicing – N3.324 trillion
- Capital expenditure – N4.125 trillion
- Recurrent expenditure – N5.641 trillion
Key Budget Assumptions
- Official exchange rate – $1: N379
- Inflation Rate: 11.95%
- GDP Growth Rate: 3%
- Oil Production: 1.86mpbd
- Oil Price: $40pd
Funding of N5.196 trillion Budget Deficit?
According the Senate, below are how they plan on financing the budget deficit
- Sale of Federal Government assets projected at N205.153 billion
- Debt financing projected to be valued at N4.281 trillion
- Multilateral and bilateral project-tied loans of N709.685 billion.
According to the Senate, one of the reasons for the increase in the budget is due to the N365 billion spending request for the upscaling of the National Social Investment Programme (NSIP).
The increase in the 2021 budget is quite worrisome, as the effects of the COVID-19 pandemic are still lingering, and the economy is yet to recovery. The projections of some key items on the budget can only be achieved when normalcy returns. One of such is the oil price. Global demand for oil is declining.